How the comeback kid remade Apple -- from the "Think Different" campaign to a "loose lips sink ships" reign of terror.

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October 11, 2000 11:30PM (UTC)

On Sept. 16, 1997, Steve Jobs announced that he would serve as Apple's "interim CEO." He moved into a conspicuously small office, close to the boardroom. He inherited Gil Amelio's secretary, Vicki, and told her that he didn't like the pens that Apple kept in stock. He would only write with a certain type of Pilot pen, which he proclaimed was "the best."

He took to walking around the Apple campus barefoot in cutoff shorts and a black shirt. One day he accosted Jim Oliver, a Wharton Ph.D. who had been Gil's assistant.

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"What do you do here?" Steve demanded.

"I'm wrapping things up."

"You mean that in a while you won't have a job?" Steve shot back. "Well, good, because I need someone to do some grunt work."

What a strange way to motivate people, Jim thought. Then again, it was a chance to work for a legendary figure.

It turned out that the "grunt work" would give Jim a close-up view of Steve's deliberations about how to save Apple. The job was to take notes at the meetings where Steve would review every part of the company and decide what to keep and what to kill.

The gatherings were held in the boardroom, which was in the only high-rise office building on the low-slung campus. It had a panoramic view of the expanse of Silicon Valley. Steve would call in the head of a product team and all of its key players. Anywhere from a dozen people to three dozen would crowd around the long wooden table. They had to show Steve all of their existing products and expound in detail about their future plans. If they made physical products, like monitors, they had to bring models of their upcoming lines. If they wrote software, they had to run Steve through the features of their programs.

Steve's attitude wasn't confrontational. He wanted to absorb a vast amount of information before he took action. Still, there was always an undercurrent of tension, and Steve would occasionally upbraid people if they didn't seem to realize the urgency of the situation. Gil had made extensive cuts, but Steve was going to cut a lot more. Steve said that he would keep only the great products and the profitable products. If something were unprofitable but strategic, its managers would have to argue for its continued existence.

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During the first review meeting with a group, Steve would listen and absorb. In the second meeting, he would ask a series of difficult and provocative questions. "If you had to cut half your products, what would you do?" he would ask. He would also take a positive tack: "If money were no object, what would you do?"

The series of group meetings helped Steve to get to know hundreds of people at Apple. And once he knew the players, he would deal with them directly. He had total disregard for the hierarchical chain of command. He would remember what several hundred people did and call on whomever he needed, always bypassing their managers. It was as though everyone in the company reported directly to Steve himself. "Steve has the ability to buffer so much in his head," Jim Oliver explains. "He can remember the last conversation and the last e-mail exchange that he had with 300 people."

He put especially intense pressure on the top executives. He tormented Heidi Roizen with constant calls to her office phone, home phone, cellphone and pager, starting at 7 a.m. almost every day. She was so unnerved by his interrogations and his frequent tirades that she decided the only way to preserve her mental health was to ignore his calls. She tried to communicate with him only by e-mail, which enabled her to consider the issues calmly and rationally, unaffected by the irresistible force of his compelling live presence.

Heidi talked with Bill Campbell, whom Steve had named to Apple's board of directors. Bill was a bona fide tough guy, a former college football coach, but he confessed that he, too, was unnerved by Steve's constant phone calls.

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"Do what I do," she advised him. "Don't answer the phone."

"That's what my wife said. I tried that. But then Steve would come over to my house. He lives only three blocks away."

"Don't answer the door."

"I tried that. But my dog sees him and goes berserk."

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In his first month as "interim CEO," Steve began walking around the office carrying a sleekly curved piece of white foam. It was the model for the size and shape of a computer, which would eventually become known as the "iMac," for "internet Macintosh." It was the creation of Jonathan Ive, who was 30 and looked more like a scruffy bicycle messenger or skateboarder than the chief designer at a major manufacturer of consumer products.

While the physical look of the iMac had been conceived before Steve took over, everything else about the computer was still uncertain. Steve's thinking was strongly influenced by his friendship with Larry Ellison as well as their unspoken rivalry. He believed the future belonged to stripped-down machines, called "network computers," or NCs, that would connect to the Internet and cost only half as much as PCs. Larry had even started his own company, Network Computer Inc., to try to cash in on the idea.

Steve decided that the iMac would be a network computer. "We're going to beat Ellison at his own game," he told his Apple colleagues, who were surprised to see Steve secretly delighting in the competition with his best friend.

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In September, Steve began taking decisive action. Gil had cut the number of research and development projects from 350 to 50. Steve cut it from 50 to about 10. Instead of hoping for some stunning technical breakthrough that would save the company, Steve looked instead at improving Apple's advertising and restoring its cool, hip image. He invited three ad agencies to pitch for Apple's business, including Chiat/Day, which had created the famous "1984" television commercial during Steve's first run at Apple.

Chiat/Day still had the same creative director from the "1984" campaign, Lee Clow, who came to Cupertino and proposed a new slogan: "Think Different."

"That's not grammatical," thought Jim Oliver as he sat there taking notes for Steve. But no one in the room had the guts to say so.

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Lee Clow said that the comeback of Harley-Davidson motorcycles was a good model for Apple to emulate. Harley's advertising convinced people that they could feel its renegade spirit even if they were investment bankers rather than Hells Angels. It rehabilitated a counterculture icon for the baby boomers who had grown up and sold out.

That's exactly what Apple needed to do.

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Apple's new advertising campaign came together quickly.

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Steve had always liked photos of cultural icons. At his first house in Los Gatos, Calif., near his mattress, he had kept pictures of Albert Einstein and an Eastern mystical guru. Steve also loved black-and-white photography. He hung Ansel Adams prints at the Palo Alto, Calif., house. Those were the elements: the slogan, the icons, the monochrome tableaux.

The first outsider to see the new ads was Newsweek's Katie Hafner. She arrived at Apple's headquarters at 10 on a Friday morning for an interview with Steve. He kept her waiting a long time. Finally he emerged. His chin was covered by stubble. He was exhausted from having stayed up all night editing footage for the "Think Different" television spot. The creative directors at Chiat/Day would send him video clips over a satellite connection, and he would say yes or no. Now the montage was finally complete.

Steve sat with Katie and they watched the commercial.

Steve was crying.

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"That's what I love about him," Katie recalls. "It wasn't trumped up. Steve was genuinely moved by that stupid ad."

On Sept. 30, 1997, Steve assembled Apple's employees for an outdoor party -- with beer and strictly vegetarian cuisine -- to celebrate the new campaign.

He explained that Apple's ads were going to convey an image and an attitude rather than simply describing a product. As a model, he talked about how Nike's ads projected a sense of athleticism and success without even showing its shoes.

"Apple spends $100 million a year on advertising," Steve said, "and it hadn't done us much good." They were going to continue spending $100 million a year, but now they were going to spend it better, he said, because now they realized that the Apple brand was one of the most valuable things they had going for them.

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One of the employees in the audience was a young woman named Kate Adams. It was the first time she had seen Steve speak close up, and she was very excited. "It was a good -- no, great -- speech, delivered in a 'I might sound like I'm musing but I'm damned sure of what I'm saying' tone," she wrote in an e-mail message to a friend.

Her friend turned out to be a software entrepreneur, Dave Winer, who wrote DaveNet, a column that he e-mailed to hundreds of the most influential people in the industry, including CEOs like Bill Gates and Michael Dell. To Kate's surprise, Dave published her e-mail in its entirety: a long, detailed account of Steve's talk.

The next day, Kate received a voice-mail message.

"Hi, this is Steve Jobs. I'd like to get together and chat with you."

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Steve's voice sounded cheerful. What did he want? Was this some management theory of his, calling random midlevel employees and picking their brains for a while? Or was he pissed off by the DaveNet column?

Kate called Steve's secretary and made an appointment. She didn't sleep well that night. The next morning at 10 she entered Steve's office. He was in the corner, typing on his Next computer. Steve relied on three computers, and none of them was a Macintosh. He had black Next machines at his home and office and a Toshiba Tecra as his notebook.

With his back turned away from her, Steve waved and told her to sit down.

Kate eyed a pile of "Think Different" T-shirts as she waited for four minutes.

Steve turned to her.

"Hi, how ya doing?" he said amiably. Then he held up a printout of her message. "Can you tell me what this is?"

Steve had "sniffing" software that could screen and search his employees' e-mail.

"I was encouraged by your talk, and I just wanted to tell my friend Dave."

"You realize this is the kind of thing that can be published?" he asked.

"Well, it already has," she said.

"Do you realize this $100 million figure is proprietary?" he continued. His tone was serious and confrontational but not outright hostile.

As she was walking out, he said:

"By the way, what do you do in the Quicktime group?"

"I'm on the engineering team," she said.

"OK."

She escaped. She knew that if she had said "marketing," she would have been fired. He still needed Apple's engineers, but he had no respect for its marketing people.

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Before Steve's takeover, Apple people loved to leak. They did so partly because the company really did have lackluster marketing. If you were proud of your work, the only way to let other people in the industry know about it was to leak it yourself. A number of Web sites, like "Mac OS Rumors," were devoted exclusively to Apple gossip.

Steve insisted on his old "loose lips sink ships" policy. At first the employees were incensed. Before long, though, they began to trust Steve to do Apple's marketing for them.

Still, the Apple rank-and-file remained fearful of the Bad Steve persona. Word got around about Steve going into meetings, saying, "This is shit," and firing people on the spot. People worried about getting trapped with him in an elevator for a few seconds, afraid that they might not have a job when the doors opened. The reality was that Steve's summary executions were rare, but a handful of victims is enough to terrorize a whole company.

For a while there was an elevator in Steve's building that had protective coverings on its walls because construction was going on, and someone said: "This must be Steve's elevator since it's padded." Another employee responded: "Is it for him or for us?"

Apple needed some kind of shake-up. It was filled with people who had virtually ignored and ultimately outlasted three CEOs as they did their own things. "I don't know if the previous CEOs at Apple had any effect on that company," says John Warnock of Adobe, which is Apple's biggest software provider. "We would have meetings with all those CEOs and nothing would happen, no traction, unless the group responsible went for the idea. The energy just dissipated into the organization, where the first person capable to make a decision is the one who makes it. But with Steve, he comes in with a very strong will and you sign up or get out of the way. You have to run Apple that way -- very direct, very forceful. You can't do it casually. When Steve attacks a problem, he attacks it with a vengeance. I think he mellowed during the Next years and he's not so mellow anymore."

Before Steve's takeover, the campus had a leisurely atmosphere. Staffers loved to hang around smoking and chatting in the courtyard of the R&D complex, which always had ashtrays stocked at the outside and inside doors of all six of its buildings. Some employees seemed to spend most of their time throwing Frisbees to their dogs on the lawns.

Steve enforced new rules. He decreed that there would be no smoking anywhere on the Apple property. Then he banned dogs on campus, ostensibly because canines were messy and some people were allergic to them.

The employees were outraged: Why didn't Steve understand them? Smoking in the courtyard was how they networked with their colleagues from other departments. It was a vital form of communications! Steve's prohibitionism forced them to take long walks to De Anza Boulevard so they would be off the Apple property. It wasted a lot of time.

And their dogs were essential to productivity, too. A lot of people worked very long hours at Apple, even nights and weekends. They were hardly ever home. If they couldn't care for and feed their dogs at the office, they would never get to see the pets.

It seemed as though Steve were pushing his own lifestyle on 10,000 others. At a company meeting, someone asked Steve what he thought was the worst thing about Apple.

"The cafeteria," Steve said.

Steve proceeded to replace the entire food-service staff. He hired the chef from Il Fornaio in Palo Alto. Before long, tofu was prominent in the menu offerings.

And yet, somehow, the reign of terror was beginning to work. Apple had long been like a civil-service bureaucracy, with thousands of entrenched employees who did pretty much whatever they wanted regardless of which political appointees were temporarily at the top. Now that was changing. People started to realize that Steve could assert his authority over seemingly any aspect of the company's life. Apple was going to follow the vision of a single person, from the no-smoking rules and the healthy cuisine to the editing of the TV advertisements. Steve was clearly in charge, and Steve was seemingly everywhere.